The forex market is huge. More than five trillion dollars are traded each day, so there are plenty of opportunities to make money if you know what you’re doing. You don’t need much money to start trading forex. Thanks to the power of leverage, it’s possible to make $100+ a day without risking your trading account. However, it is also easy to lose significant amounts of money, so pay attention to the following tips if you want to start forex trading as a side gig.
Choose the Right Forex Broker
To begin forex trading, you need a trading account with a broker. These days, it’s very easy to open a trading account with an online broker. There are dozens to choose from. Read reviews and see which brokers offer the most reliable service. You need a broker that provides responsive customer service, lets you withdraw money without too many restrictions, and doesn’t charge ridiculous fees for each trade you make.
Look for a broker that offers demo accounts, so you can get to know the platform without risking your trading account.
Don’t Risk Your Trading Account
Forex trading is risky. Even if you are extremely risk-averse, you are unlikely to make money on every trade. For this reason, it is essential that you have a risk management plan and use forex signals to your advantage.
Never risk more 1% of your trading capital on a single trade. The golden rule of successful forex trading is small trades wins the race. By only making small trades, it isn’t so catastrophic if the market moves against you and you don’t lose a fortune if you make a bad decision.
Utilize stop losses to prevent problems and don’t get sucked into a losing spiral. If a trade goes bad, cut your losses. Chasing losses is always a bad idea.
Have a Trading Strategy
A trading strategy is your blueprint for success. Decide how you want to play the market. Are you going to focus on technical analysis or are forex signals your go-to cue? Some traders open an account on a social trading platform and mirror the trades of other, successful forex traders.
It doesn’t matter which strategy you use; what’s important is that you have a strategy. Consistency is the key to success. If you keep switching out the method you use, it will be very difficult to know which trading style is working the best.
Study the Markets
To be successful at forex trading, you need a good understanding of how the markets work. Watch and learn. Keep up to date with the market news and see what effect political and economic news has on your chosen currency pair.
Read the financial news every day and use your weekends to study the markets in more detail. Historical trends are your new best friend.
Keep a Trading Diary
It is sensible to keep a trading diary. You can use this to record your trades and study what was successful for you over time.
Lastly, always keep a cool head. Successful forex traders don’t panic when the market does something unexpected.